Mobile advertising is hot hot hot

Mobile advertising 

I have been wondering if the mobile advertising sector has been overfunded by VCs, and indeed whether at the end of the day it will be a separate category, but on the back of 3GSM, one thing I know for sure is that the mobile advertising market is HOT.

ScreenTonic are buzzing and Admob have gone from 500m ads served when I posted on this topic on November 27 to 1.2bn today.  Think about that for a second – 140% growth in under three months.

Adinfuse was a new one for me – over from the States and being run in Europe by Stephen Upstone (formerly of behavioural targeting firm TouchClarity which was acquired yesterday by Omniture for $52m).  Stephen couldn’t have been more excited about the market opportunity in front of him.

These are all mobile banner advertising businesses and I am still of the belief that CPMs will drop off as inventory grows and the cool factor of doing mobile campaigns wears off – but think about all the inventory that is coming on-line.  If half of the mobile content plays at 3GSM do half as well as they hope that will offset any declines in CPMs – and then some.

The separate category question is a good one though.  The FT are using DoubleClick to serve ads on their mobile platform – they are doing this in a simplistic fashion, but DoubleClick and the other adserver vendors (Atlas being the other large one) have mobile on their roadmap and will be in this market before too long.  Admob and the other start-ups in this space need to be in a race to get scale before that happens.

The other complicating factor is the role of the operators.  They have great data about subscribers that could be used to target ads, but the opportunity will be complicated to execute on and they haven’t exactly got a good track record.  They see the potential of this market though, so expect a lot of activity.  Telco2.0 blog explains the complexity really well.

Mobile search advertising will also be big (at some point) and I am also thinking about how at Buy.At we might cut the wires for the affliliate model.